Addition by Addition

Interesting discussion on Twitter today with @cityofedmonton.

It all began with a tweet from me, @lesoteric:

from the likely true file : #ecca redevelopment = no real tax benefit to the city, residents would live elsewhere in #yeg anyway

that last one is based on @iNews880 #yeg Pro-airport lobby group claims the numbers favour saving the CCA http://bit.ly/9Pa4Z5

which garnered this reply from @cityofedmonton:

@lesoteric econ impact report to Council http://bit.ly/czD9iZ agreed #ecca res would be a shift, but land sales revenue (not tax) = net gain

So I decided to read through the economic impact assessment to Council and here are some of the highlights:

An expected increase in Edmonton's population to 1.19M by 2045 (an increase of 359,000 residents), that's a growth rate of 1.17% per year, right in line with historical values. Of the projected 32,000 to 37,000 new residents on the #ecca land after redevelopment (to be completed in 2044) ~28,000 would already be residents of the city (or become residents anyway). So of the projected increase in tax revenue ($70,000,000) $61,250,000 would be revenue the City would realize in any event. If we use the numbers provided by the city the other 327,000 people migrating here should provide an additional $944,376,000 of tax revenue. Maybe the city should get out of the development business and get into the marketing business. Seems to me if the taxes are what we're after that is a much quicker way to get it done (especially with a vacancy rate approaching 5.5% in spring 2010 and the inventory of single detached homes at an all time high in 2009). Of course you need jobs for those people and Edmonton showed a net job loss in 2009 and forecasts for a very modest gain in 2010). That population projection is one of the base assumptions of the whole #ecca redevelopment plan.

A prediction that property values around the airport will appreciate because of the redevelopment. All of the neighbourhoods around the #ecca parcel have average household incomes below $40,000 per year so redevelopment amounts to structured and deliberate gentrification. That, in itself, may not be bad, but where do lower income families have to live when rents / taxes become too onerous? Well, if 28,000 people move in from the suburbs, I guess that's where we would find an oversupply of housing with a lack of demand and consequently, lower prices. In the plan much is made of the cost savings of the #ecca project, but nothing is mentioned of the costs of maintaining the the infrastructure of other neighborhoods affected.

The assessment also mentions the Net Present Value of the land, after accommodation is made for all new infrastructure to service the land. Existing core neighborhoods in need of redevelopment (The Quarters, Downtown, Oliver, Queen Alexandra) already have that infrastructure, with the added benefit of people already living there and paying the freight on that infrastructure, rather than building all new and passing that cost along to existing property owners. The report did not include an NPV of anything other that a redeveloped #ecca.

People aren't fleeing the suburbs to live in the lowest income part of the city, (I've asked a few and they really do not relish the idea, even though they all support redevelopment) and even if they do their taxes aren't increasing anything (what will the assessed values be on new housing surrounded by older housing, shopping malls, colleges, and a highway) but simply being paid in a different location and the people they displace will, in all likelihood, continue to inhabit the sprawl the first group helped create.

I'm fairly disappointed with the report as it only makes a case for redevelopment with no balance given to keeping #ecca open or to expanding service (a reasonable alternative, if only for the business case), and only a cursory mention of the (relatively) small investment required to renew #ecca as a commercial passenger airport.

In the end what this city needs is to push infill development in neighborhoods which have a population already and all of the associated facilities; schools; roads; businesses; parks; etc...rather than reinventing the wheel by demolishing and building new. If we don't knock over #ecca and in ten years it is a wasteland because all of the business went South (literally), then it will be even cheaper to redevelop, and the City loses nothing in the interim because there are already other opportunities in core neighborhoods for revitalization and redevelopment.